$100 Invested in 100 $1 Lottery Tickets

Total Time Spent on Investment: 10 minutes spent online finding lottery ticket with the best odds. 5 minutes spent buying lottery tickets. 15 minutes spent scratching off all the tickets.

Research and Preparation: Gambling and the lottery have always held an enticing allure for a lot of people: the idea that you could spend just $1 and be rewarded in prizes that are worth exponentially more, and all it would take is a little bit of luck and all your problems would be over. I knew I wanted to try my luck on $1 lottery tickets because I thought it would be cool to buy 100 of them. I also knew that I could find the odds of winning online at http://nylottery.ny.gov/.

After comparing all of the odds for the $1 scratch off tickets I came to a couple of conclusions:

– There are twelve different $1 scratch off tickets available in New York

– The odds of winning ranges from a best of 1:4.64 (Instant Take 5)

– To a worst ratio of 1:5.09 (Happy Birthday Cupcakes)

(Never buy birthday themed tickets)

– The average odds of winning on a $1 scratch off ticket was 1:4.88

– The NY lottery website never refers to odds of winning, but instead calls it “Chances of Winning”

– The $1 scratch off ticket with the worst odds is the “Happy Birthday Cupcakes” ticket (1:5.09), ticket (1:5.09). Also, the other birthday themed ticket “Happy Birthday Presents”, with odds of 1:4.99, has the third worst odds of the batch. If you value your friends and give them lottery tickets for their birthdays please don’t buy them birthday themed tickets to help them increase their odds.

(Don’t buy these tickets either)

– The $1 scratch off ticket with the second worst odds is the Gold Rush, 1:5.02. I assume it has such bad odds since the allure of gold suckers people in.

How I chose which lottery ticket to buy?
After seeing the spread of the odds and the possible prizes I decided to choose the $500 A Week For Life ticket. It’s overall odds of 1:4.84 wasn’t the best, but it put it in the better half. Also, its namesake price of $500 a week for life was the best possible grand prize out of all the $1 scratch off tickets. Winning $500 a week for life would have provided the greatest possible return for my $100 I can think of. Of course the odds of winning 1:7,938,000 but, “hey you never know.”

Some of the other odds for the $500 A Week For Life ticket:

Prize

Odds of Winning

Expected Winning Tickets

Total Winning Amount

$1

1 in: 10.00

10

$10

$2

1 in: 15.15

6

$12

$4

1 in: 62.50

1

$6

$5

1 in: 125.00

0

$0

$10

1 in: 100.00

1

$10

Total

1 in: 4.84

18

$38

To make the above table I took the total number of tickets (100) and divided by the odds. This left me with “Expected Winning Tickets”. If this number had a remainder, I rounded down since you can’t buy or win a partial ticket. Also, everyone loses when they gamble, so I wasn’t going to give myself the benefit of the doubt.

So it looks like I should have anywhere from 18 to 21 winning tickets, and win a prize amount of about $38 to $40, for a return of at least -60%.

With my ticket chosen and my research done I headed to my local bodega and asked if they had 100 of the $500 a Week For Life lottery tickets, just to check before I bought some. They did.

(Counting 100 lottery tickets)

(Checking all of the tickets)

As soon as I had paid for the tickets with my five twenty dollar bills I couldn’t wait to get home. (Side note: something annoying about lottery ticket buying is it is cash only, so no credit card rewards points here.)

(Stack of lotto tickets)

All of the tickets were stacked and ready to scratch! Was I about to be the proud recipient of $500 a week for the rest of my life? Or had I just thrown $100 down the drain?

(Guess which pile is filled with winning tickets?)

If you said the one on the right then you are correct. After fifteen minutes of furious scratching I came away with twenty two winning tickets and a total prize amount of $41. I had lost $59 on this investment in a matter of twenty minutes, and I had actually slightly beaten the odds that I had found and reproduced above.

Reason for Investment:

Everyday, millions of people in America play the lottery and hope for the best, but more often then not it is just them throwing their money away. But wouldn’t it be great if you could just on a whim plop down $1 and buy a ticket that changed your life? I decided it was worth it to try it a hundred times over and invest $100 in $1 lottery tickets.

Returns: $41. I actually came out ahead of what I had expected on this investment, but even that meant a massive loss of $59.
My Total Winnings Table:

Prize Amount

Number of Winning Tickets

Total Winnings

$1

13

$13

$2

7

$14

$4

1

$4

$10

1

$10

Total

22

$41

As you can see the predictions from my research were almost spot on.

(The big ticket winner was just $10)

The thrill and rush of possibly winning started to wear off after about the twentieth losing ticket. Each card had a couple of “Life” symbols on them, and every time you got a second you just dreamed of seeing the third one under the remaining graphite. However it never appeared and never will and it just kind of turned depressing. How could people put themselves through this humiliation and teasing every day of their lives? This is definitely an investment that is not rigged in your favor and can never really bring you positive returns.

Comments

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Well of course you came out behind. You scratched them all. If you are buying in bulk, you get to exploit the weakness uncovered by Eli Rosenberg, as reported in Wired magazine. Essentially, he found a statistically significant (3/5) portion of lotto scratchers have raised inks over the winning spaces. Then, you return the unscratched cards, claiming they were for a charity and weren’t bought. Rosenberg suspected it was a laundering scheme.

I knew someone that worked at a gas station and they found a pattern in the winning lotto tickets. They would guess at which tickets would be the winning ones. I think they were right 75% of the time. It was also against store policy them to buy lotto tickets from the same store. So, if you found the pattern with the id number at the bottom you could potentially beat the system.

So to break even, you need to live
1$-38$/100=0.62$
0.62*7938000/500/52 = 190 years…

In Belgium there’s a lottery where you break even after 70 or 80 years. Meaning if you’re SURE that you will live to be 100 years, it’s a business opportinity 😉 (If you’re not sure you’ll need to look up the mortality distribution…)

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